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Lawmakers Propose Crackdown On Nuclear Cost Recovery

Some say utility companies are taking advantage of a Florida law that lets the companies start charging their customers for nuclear power plants before they even start construction. Now, a group of lawmakers is looking to crack down on the practice, while maintaining an avenue for those companies to build the nuclear plants.

In 2006 lawmakers passed a law, known as the state’s nuclear cost recovery provision, that lets utility companies charge their customers for nuclear power plants before they even start building them. The idea was to help the companies pay for building the plants in order to expand the state’s energy portfolio and reduce dependence on more traditional sources. And Senator Jack Latvala said when lawmakers passed the rule, it probably made sense for the state at the time.

“Who knew that natural gas prices would come down as much as they’ve come down.  They were very high back then. Who knew that fracking would become a widely used process to produce new supplies of natural gas. Who knew that we would go into an economic recession that would actually for a period of time stop the fluctuation influx into our state. They made determinations based on the projections that they had in good faith at that time, but times have changed," Latvala said.

And Latvala said it’s something his constituents are starting to get pretty concerned about. The Republican from Clearwater is joining a group of several other senators from the Tampa area to make changes to the law. The proposed bill, will be sponsored by Republican Senator John Legg of Lutz. It would create an adjustable interest rate for money borrowed during construction. It would impose a deadline for when construction on the plant must begin.  And if the company doesn’t complete the project it requires it to return any money it earned from the project. And Legg said this is just an example of lawmakers learning as they go—saying it reminds him of an old Mark Twain saying.

“When he was a boy of 14, his father was so ignorant, he could hardly stand to have the old man around, but when he got to be 21, he was astonished by what he had learned in seven short years,” Legg said.

Meanwhile Representative Michelle Rehwinkel Vasilinda, a Democrat from Tallahassee called the proposal a “Band-Aid.”

"Or even could be a white wash, telling consumers that they’ve done something and then not doing anything, not REALLY doing anything. We need to move the state forward and this half measure doesn’t move us forward," Rehwinkel Vasilinda said.

Rehwinkel Vasilinda has filed her own legislation, which would completely repeal the state’s Nuclear  Cost Recovery rule. And she said she sees Senator Legg’s bill as an attempt to block her bill from getting through.

“The utility companies do not want repeal. The utility companies are very strong in this state. They’re all over all these senators and house members,” Rehwinkel Vasilinda said.

But Legg said the legislation is not intended to block Rehwinkel Vasilinda’s bill and adds he’s not ruling a full repeal out as a possibility.

“By going forward with this approach, what we feel is we’re bringing the dialog out. We’re having this conversation, but we’re also putting provisions that we believe will protect the consumers, but we’re also provide ample opportunity for the energy needs of our state and for the energy companies to step forward and be part of the solution, not part of the problem,” Legg said.

Meanwhile, the Southern Alliance for Clean Energy, which launched a legal case against the Nuclear Cost Recovery law because they say it is unconstitutional and unclear, is applauding the lawmakers for looking into the issue. Susan Glickman is a spokeswoman for the organization. She said a repeal would be preferable, but she’s glad to see the conversation getting started.

“I appreciate their leadership. It’s a long road and we need to have something that’s going to protect consumers and the only thing that’s going to protect consumers is something that’s going to have a better utility planning process,” Glickman said.

Representative Rehwinkel Vasilinda has already filed her legislation to repeal the law. It’s House Bill 4003. The group of Senators have not yet filed their proposal.

For more news updates, follow Regan McCarthy on twitter @Regan_McCarthy